Travel Agent License: Do You Need One? Read This to Find out.
There's a lot of things to think about when you're starting up your travel agency—a name, a niche, how to find clients. One day, it dawns on you, do you need a travel agent license? Is there even such a thing as a travel agent license? How do you get one? Here's the quick answer to your question: Depending on what state you live in — or if you want to sell to residents of states with seller of travel requirements — the answer is yes, you may be needing one.
Since we last updated this article, there have been some critical changes to Seller of Travel (SOT) laws (aka travel agency licensing). Trying to navigate seller of travel laws is like a bureaucratic fun house! The good news for you is that HAR went deep in to deepest darkest reaches of the SOT fun house and we're here to tell you, in laymen's terms, how to get the travel agency licensing you need.
A Travel Agent License in the United States
When we're discussing an agent in the United States and talking about a travel agent license, what we're referring to is really just the government red tape (ahem, and fees) of registering your travel agency. It has nothing to do with training or testing of your travel agent knowledge. You fill out some forms, pay a fee, and get a seller of travel number.
In the US, there are four states that have Seller of Travel Laws
Let's start with the good news: On the national/federal level, you don't have to worry. The US government isn't looking to cash in on travel agencies through registration/licensing fees. Whew!
The travel agent license thing changes a bit when it comes to the state level. Drat.
In the US, there are four states that have Seller of Travel Laws, i.e. a travel agent license. Before I tell you more, be warned you're going to feel overwhelmed by all the fancy red tape and bureaucratic hoops to jump through—don't worry, it's natural! As with anything, there's a general miserableness that accompanies government paperwork and legalese. Remember, it's temporary.
When we talk about The Big Four SOT States®, we're talking about California (CA), Florida (FL), Hawaii (HI), and Washington (WA). (Note: Don't you think a fake trademark is necessary on such a catchy term? Looks way more professional.) Click below if you want to fast-forward to a specific state!
- California Seller of Travel
- Florida Seller of Travel
- Washington Seller of Travel
- Hawaii Seller of Travel
- Other states with travel agency Regulations
Why do these states get so much attention? Because anyone who even sells to residents of those states need to apply for an SOT. If you have clients in CA, FL, WA, or HI, this means YOU. If you're located in any of the states above OR if you're planning to sell to residents of those states, you need to heed their seller of travel requirements.
We'll start by taking a high level look at things with our infographic, and then we'll start diving deeper into the nuances and intricacies at the state level. Sound good? Alright, let's go!
A Visually Pleasing Way to Look at Seller of Travel Laws
Here's a visual rundown of The Big Four SOT States®. We whipped up this neat infographic for you that breaks the cost and other data points into an easy-to-read visual.If you want to shortcut to a state, just click on the state you want in the infographic.
You do have to enter your email to see the infographic, but I promise, it's really helpful. :) All the info in our infographic can also be found in the article, but the infographic is just a less overwhelming way to look at things.
Four States that have Travel Agency Licenses / Registrations
The thing to know about The Big Four SOT States® is that they aren't just contained to state lines. If you live in New York but you're booking a client that lives in one of The Big Four SOT States®, guess what? You're expected to comply with the Big Four laws.
The SOT for California, Florida, Hawaii,
Iowaand Washington apply to any agency that does business with residents of those states. — Daniel Zim
Here's a great explanation from Daniel Zim, travel attorney1:
"The SOT for California, Florida, Hawaii,
Iowa and Washington apply to any agency that does business with residents of those states. They are extraterritorial laws meaning that the law extends far beyond the borders of the state. The business does not have to reside in the regulating state, the business could reside anywhere in the world but it would have to comply with California, Florida, Hawaii, Iowa and Washington."
California Travel Agency License: Do You Need One & How to Apply
Let's start with the doozie. California. California Seller of Travel requirements are ones to pay attention to since they've gone after agencies that don't have an SOT. Because they're one of the Big Four SOT States® if your travel agency is located in California or you book clients who reside in California, you may need a travel agency license/ seller of travel number in California.
There were a few SOT law updates made by California in January 2017. The changes had two major impacts:
1. California amped up enforcement on business regulations.
This means that not only do agencies need to comply with CA's SOT travel regulation, but they also need to comply with CA business regulations. In short, it means that if you need a CA SOT license, you also need to register for a CA state business ID. If you don't live in CA, you'll fill out the 'foreign entity' (out-of-state or out-of-country) form for your respective business structure.
2. California seller of travel exemptions
I know, increased regulations make your eyes glaze over. BUT, these regulations come with good tidings if you're a (relatively) small businesses.
If you meet all of the exemptions below, you do not need your own travel agency license/seller of travel number in California!
1. Your business model is: Sole Proprietor, single-member LLC, or single-shareholder S Corp.
2. You have a written contract with a host agency (that has a CA SOT).
3. You are selling through your host, with your host's accreditation number.
4. You use your host's accreditation for all bookings (no booking direct and bypassing the host).
5. All fees (consultation/service fees) must be processed through the host agency.
6. Clients must pay host or supplier directly. (No taking cash. Checks would need to be made out to the host agency.)
7. You must disclose to every sale that you belong to a host, including the host's name, address, phone number and registration number.
3. Steps to apply for a California Seller of travel
Bummer if you qualify for exemption. But this will jumpstart your process. Here's the steps to apply for CST:
1. Register for Travel Consumer Restitution Corporation:
If you need to apply for your own California Seller of Travel (CST), you first need to shell out $275 and register your agency with the Travel Consumer Restitution Corporation. Who needs this? According to the CA dept. of justice (DOJ), "A registered seller of travel whose principal place of business is in California and who does business with persons in California must participate in the TCRC."
Of course, to keep it interesting, there are exemptions to TCRC:
- Applicant does not do business or advertise to persons located in California, including by internet advertisement; but has a location in California.
- Applicant's principal place of business is outside California.
- Applicant has no location or agent in California.
- Applicant is neither an issuer nor a subsidiary of an issuer of securities that are listed on a national securities exchange or designated as a national market system security.
2. Establish a Trust Account:
If you apply for a CST, you will need to establish a trust account for any direct payments from clients. Of course, there are alternatives for you rebels. Here they are:
- Credit Card Transactions: If you only accept credit card payments and you don't have access to clients funds, this is a great alternative to a trust. Do you qualify? Check out this California Seller of Travel affidavit form.
- Acquire a Surety Bond
- Include a Consumer Deposit protection plan
Once you're registered through the TCRF, you apply for your CST. You can go on and apply for your CST by filling out this form.
4. Renew annually:
You'll need to renew your CST every year. Renewal is a choose your own adventure situation. Here's your two paths:
- There have been no changes in your agency: Congrats! This is the easy route. If all your agency info is the same when you previously applied, all you need to do is fill out this attestation form.
- There have been changes: This is the thornier path, but all you have to do is read these instructions then fill out this renewal form.
5. Hurry up and wait!
It's confusing. Don't be afraid to contact their office for clarification.
- Email: Sellers.Travel@doj.ca.gov
- Phone: (213) 897-8065
How to Apply for a Florida Travel Agency License
Since Florida is a member of our Big Four SOT States®, we know that Florida's travel agency license/ Seller of Travel law applies to any travel agency who books clients residing in Florida, regardless of the agency's location, right? [In unison: "Yes, Steph."]
You're doing so great!
If you know you need a Florida SOT number, the cost is $300/yr, unless you're an ARC accredited agency for 3+ years under the same ownership, then you'd file for an exemption. And for all you active duty military, honorably discharged veterans, military spouses or surviving spouses (thank you for your service!), you may be eligible for a waiver of the registration/renewal fees (see section 2(c) for requirements). Here's the military fee waiver request form.
Beyond the $300, travel agencies also need to provide a $25,000 Surety Bond. But good news! For those of you with a clean track record, you can also fill out a Security Reduction Application which would bring the bond amount down to $10k-20k, depending on your sales. And if you've got a clean record and 5 or more years of operating in the state of Florida, you can file for a complete waiver of the bond requirement (waiver form is in the registration/renewal application).
Now, let's add another layer. If you're an independent contractor with an host agency, can that independent contractor use the host's seller of travel number?
If you meet ALL of the exemptions below, you can use your host agencies Florida travel agency license / Seller of Travel number, but you must fill out the Independent Agent Statement of Exemption Form ($50/yr):
- You must be with a host agency that has a FL Seller of Travel number; AND
- Have a written contract with the seller(s) of travel listed above (you'll provide them a copy of the contract); AND
- You do not accept fees (service/consultation/etc), commission or other valuable consideration directly from your clients (they must go through your host agency); AND
- You do not have unused ticket stock in your possession; AND
- You do not have the ability to issue tickets, lodging or vacation certificates, or any other travel documents.
Notes on the Hawaii Travel Agency License
Again, Hawaii is one of our Big Four SOT States® so if you're working with clients who live in Hawaii—even if your agency isn't in Hawaii—you'll need a Hawaii travel agency license/ seller of travel number.
There's a few key points to know about Hawaii's travel agency licensing:
- If you're selling stand-alone activities to your clients, you technically also need an Activity Desk license.
- Similar to the CA SOT laws, regardless of where you live, you'll need to register your business in Hawaii if you are an LLC, LLP, Corporation, or Partnership. (Out of state agencies will register as a foreign entity.) Here's the current business registration fee schedule.
- And this last one is the most challenging. Travel agencies need to have a business bank account with a bank located in Hawaii. Stay tuned on that one though, because we've got a workaround below
One of our awesome Hawaii-based readers gave us the scoop on Hawaii's travel agency licensing/ seller of travel laws—thanks for your sleuthing, Mara Kunkel! In addition to registering for a seller of travel license, Hawaii has regulations about opening a client trust account. But thanks to Mara's sleuthing, we've learned that Hawaii agents who want to go with a mainland host can apply for a waiver, assuming the agent is not handling any of the clients' money—no cash, no checks—directly.
Hawaii agents with mainland hosts can qualify for a trust account waiver only if they do not handle client monies. Similar to CA, all client money needs to go through the supplier or the host agency. If this is up your alley, you can include that information in a letter and asking for a trust account waiver along with your application for Hawaii's SOT.
The Hawaii travel agency license costs $215/yr on the even-numbered years and $146/yr on the odd-numbered years (weird, I know).
Notes on the Washington Travel Agency License
When it comes to Washington's travel agency license/ seller of travel laws, it's going to sound awfully familiar. Of course we have the start with the same base as the other Big Four SOT States®—you'll need the license not only if your agency is in Washington state, but if you service clients who live there.
Since (most) ICs sell travel under their own brand, they will have to get their own Washington travel agency license.
And like Hawaii and California, Washington wants to know who owns your agency so they require proof of business registration. But unlike Hawaii and California, if your agency is located outside Washington state, you can send proof of business registration in your home state. Hurray for small victories!
And here's a new twist: If you hold payments for travel for more than 5 days, you'll need to do 1 of 3 things:
- Open up a Seller of Travel trust account (business account) at a bank in Washington state.
- Purchase a Surety Bond (the size of bond is based on the previous years sales).
- Be a member of good standing in a professional association approved by the Department of Licensing, through which you get both a $1,000,000 errors and omissions policy and a surety bond of at least $250,000. What associations offer that, I honestly have no idea...
As for independent contractors (ICs) and if they can use their host agency's Washington seller of travel number, that depends. If the IC meets the following criteria, they can use the host's Washington travel agency license number2:
- The host agency has a Washington Seller of Travel number and has the IC registered under their number.; and
- The IC is conducting business using the name of the host agency; and
- No money goes through the independent contractor. All money is collected in the name of the host agency and is process by the host agency (no collecting cash, no checks made out to your agency, service/consultation fees would need to be charged under the host agency's name).
The bottom line on the host/IC situation? Since (most) ICs sell travel under their own brand, they will have to get their own Washington travel agency license.
Plan on the Washington seller of travel licensing setting you back $202/yr.
Other States with Travel Agency Regulations
The Big Four SOT States® are the ones everyone will always say have Seller of Travel (SOT) laws/travel agency licensing but there's a few I found I think should also be mentioned:
- Delaware: If you're a travel agency in Delaware (scroll to No. 24), you are required to register for an occupational license. The cost is currently $225 USD. It's a bit different than the state travel agency licensing laws above because you only need it if you open a travel agency in Delaware (vs. needing it if you plan to sell to any Delaware residents).
- Illinois: Surprise! If your agency is based in Illinois, you may need to establish a trust account in order to adhere to the Illinois Travel Promotion Consumer Protection. Our insider source (Ann Thomson Nelson in the comments) mentioned this requirement only pertains to agents taking payments from clients, rather than paying the supplier directly. Even then, there are exemptions if you a.) have equivalent of 1M liability coverage through Errors and Omissions Insurance, and b.) have a surety bond of $100,000 or more.
- Louisiana: This state is occasionally mentioned by industry attorneys, and thanks to our spies on the ground (aka: Alec in the comments) we now understand that Louisiana requires an annual licensing fee for retail travel agencies (storefronts). Are you a home-based agency in Louisiana? You're in the clear! What's the cost? It depends on your gross sales. So check out this resource on Louisiana travel agency licensing fees to see where you fall.
- Massachusetts: In MA, you can't just sell travel willy nilly without doing your due diligence. What do I mean by due diligence? If you're a travel agency based in MA, make sure you're familiar with nitty gritty. By nitty gritty, I mean section 15:07 of MA's 940 CMR. (Please don't ask me what a CMR is.)
- New York: NY also has hard and fast laws for sellers of travel. I'd like to say they're common sense, and that so long as you're not a jerk, you're okay, but you know what, I'm going to go ahead and resist that temptation. Instead, if you're an NY-based agent, go read NY's Article 10-A Truth in Travel Act. Particularly, look at this chapter, Section 157-A for a very specific outline of disclosures you must provide for your travel clients.
This is not an exhaustive list. Rather, it's a crash course in states that have regulations that may directly impact travel advisors. If you're a tour operator, or participate in travel club sales (or whatnot), chances are that since you're selling travel, you'll need a seller of travel license.
Local/City Travel Agent Licensing
In the beginning, we said there are no travel agency licensing laws on the national level. Then we zoomed in on the state level, where we had The Big Four SOT States® (Florida, California, Washington, Hawaii) with seller of travel/ travel agency licensing laws. Now let's talk about on the city level.
Breaking down regulations to the city level is complex. The local level is going to involve some research on your end. What you'll want to do is familiarize yourself with local laws that affect travel agencies. While you're digging around, ask your local Chamber of Commerce if there are any general business regulations in your city that you should be aware of.
If you don't know where to start to find out more about local laws, contact your Chamber of Commerce or visit our resources page to find your local SBA or SCORE office.
Did We Mention Travel Insurance Licensing... and Waivers?
Yeah. We have more info and regulations for you. Boring, confusing, and frustrating... but very important. Find out more on travel insurance licensing for travel agencies.
Most travel agencies have a travel waiver for their clients. See what other agencies are including in their travel waivers and download a free sample travel waivers and an Oversea Travel Tips & Checklist.
Save Some Money on a Travel Agent License with a Host Agency
Since the site focuses on host agencies, it's important to mention another host agency benefit—saving you money on your travel agency license. In some states, you can use your host's Seller of Travel number instead of purchasing your own!
For instance, in Florida, independent contractors that are exempt don't have to pay the full $300 annual registration fee for a Florida Seller of Travel number. Agents with a host can go under their host's Florida Seller of Travel number and pay only $50/yr - a savings of $250. 😊 And now hosted agents that meet the criteria for exemption can be under their host agency's California Seller of Travel number — a savings of $100/year.
Check with your host agency or the state's seller of travel office for details. If you're interested in finding a host agency, visit our host agency list and reviews.
It's hard to find info on a travel agent license. Try googling 'Iowa Seller of Travel'. Trust me, it's not easy to find the right page! I wrote this article to save agents time and money. If it helped you out, please drop us a line in the comments or share the article—doing so makes it easier for others to find this page.
Editor's note 9/10/2015: Nevada did have a seller of travel law... then they kept suspending it for what felt like forever (ahem, 6 years). And in July 2015, Nevada's Seller of Travel Law is officially repealed and Nevada travel agents do not need a license to sell travel.
Editor's note 01/28/2021: Iowa repealed their Seller of Travel requirements as of 06/2020 so is no longer included in this article.
Photo Credits: Brandi Carolyn
- Sorry, we need an obligatory disclaimer. I am not an attorney (but here are some travel attorneys!). I aggregated this info from first-hand experience and other industry sources to create a resource for those looking into a travel agent license. All info is accurate to my knowledge but information given should be fact-checked and never be considered legal advice. ↩
- 5(a-b)https://app.leg.wa.gov/RCW/default.aspx?cite=19.138.100 ↩